In my July essay on "Understanding The True Cost of Video Game Censorship Efforts," I pointed out how outrageous it was that politicians continue to burn money on fruitless regulatory measures that are destined to be struck down as unconstitutional. I argued that the nearly $2 million in legal fees and expenses recovered by the video game industry after winning its legal cases against various governments could have been spent much better by public policy makers:

That $2 million in recovered legal fees could have been plowed into educational efforts to help explain to parents how to use the excellent voluntary ratings systems or console-based parental control tools that are at their disposal. Moreover, that $2 million in recovered industry legal fees does not account for the resources that state and local officials put into these regulatory efforts. So, we are talking about a much greater deadweight loss for society and taxpayers.

Well, that opportunity cost / deadweight loss grew even higher today when the state of California reimbursed the Entertainment Software Association (ESA) $282,794 for attorney's fees after losing a recent legal battle in the case Video Software Dealers Association v. Schwarzenegger. The ESA sent out a press release about the case today that dramatically points out the opportunity cost of such regulation:

The ESA noted that this payment comes at an especially troubling time for the state, calling to mind other pressing budgetary and legislative priorities and issues, including:

* California is currently facing a $15-billion budget gap
* More than 10,000 California state employees were laid off last week in light of the budget crisis
* Governor Schwarzenegger is seeking to cut wages for nearly 200,000 state employees
* The state already cut 10 percent to its Medicaid reimbursement rate and deferred payments to vendors

"Caregivers are not well-served by court battles and legal fees. Rather, they would have been far better off if state officials worked together with our industry to raise awareness about video game ratings and the parental controls available on all new game consoles -- both of which help ensure that the games children play are parent-approved."